On Wednesday, Honda (NYSE:HMC) Motor announced its ambition to double its global hybrid car sales to 1.3 million vehicles annually by 2030. The Japanese automaker views hybrid vehicles as a crucial intermediary step before the full adoption of electric vehicles (EVs), which are expected to become more prevalent in the future.
The company plans to introduce new, more efficient hybrid systems for its compact and mid-sized models beginning in 2026. These advancements will involve overhauling engines, platforms, and control technologies. This shift comes as demand for gasoline-electric hybrid cars increases, particularly in North America, which is Honda's most profitable market. The growth in hybrid demand contrasts with the slower expansion of the EV market.
In the United States, the environment for EVs appears to be getting tougher, with President-elect Donald Trump intending to reduce government support for the sector. Despite this, Honda remains committed to its long-term goals of increasing EV production to over 2 million units by 2030 and phasing out all but EV and fuel cell vehicles by 2040. In the interim, the company is focusing on enhancing its hybrid offerings, a strategy that aligns with that of its competitor, Toyota (NYSE:TM).
Hybrid vehicles are seen by Honda as a transitional solution until EVs gain full market penetration. "Hybrids will serve as a bridge until EVs become fully widespread," stated Katsuto Hayashi, the chief of Honda's automobile operations, at a media briefing. He expressed confidence in Honda's ability to lead in the hybrid market, despite the popularity of Toyota's Prius, and noted that Honda would not alter its development and investment strategies in light of the anticipated changes in U.S. policy.
To increase profitability, Honda aims to double the per-vehicle gross profit for hybrid models manufactured at U.S. production sites after 2027 by utilizing more shared parts across different models. Although the company has not disclosed specific fuel efficiency targets, Koji Ninomiya, head of Honda's Automobile Development Center, assured that they aspire to achieve fuel efficiency "comparable to, or better than" that of their top hybrid competitors.
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